This UAE firm offers a letter of guarantee with no fees in less than 24 hours
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This UAE firm offers a letter of guarantee with no fees in less than 24 hours

This UAE firm offers a letter of guarantee with no fees in less than 24 hours

UAE-based Finance House offers the Al Rabeh Guarantee service to support local businesses

Gulf Business

The UAE has seen a surge in credit facilities such as letters of guarantee in recent months.

The cumulative balance of letters of guarantee and other credit facilities provided by banks and other business entities in the UAE reached Dhs4.533 trillion in February 2020, an increase of around 4.3 per cent compared to Dhs4.347 trillion in January, according to statistics from the UAE Central Bank.

Specifically, the total balance of letters of guarantee at the end of February stood at about Dhs382.7bn.

“This significant increase in credit facilities is reflective of the continued business momentum maintained by various economic sectors in the UAE with overseas partners despite the global slowdown witnessed worldwide,” a statement issued on official news agency WAM said.

Falling under the umbrella of trade finance, a letter of guarantee is an irrevocable undertaking issued by a bank or a registered financial institution for payments of certain agreed amount of funds on behalf of its customer, who has entered or is willing to enter into a contract with another party normally called in the guarantee as the beneficiary. It guarantees the customer’s proper performance and fulfillment of the obligations towards the beneficiary under the underlying contract.

While there are several products available in the market, Finance House, a UAE-based registered financial institution has now launched the Al Rabeh Guarantee service, which is available to local business for zero processing fees.

Al Rabeh Guarantee from Finance House covers all types of guarantees (covering tender, performance, advance payment and others) and offers “competitive interest rates” on 100 per cent cash deposits against the guarantee value.

Processed in less than 24 hours, the service allows businesses to complete all the procedures hassle-free.

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